In many industries, when a professional provides a transactional service for a client (such as executing a trade in the securities industry), the professional has discretion over the price (i.e. the professional's fee or commission) charged to the client for the service. Ultimately, the price charged by the professional must be within the market-acceptable boundaries, or clients will go elsewhere. However, if the price charged is too low, the professional may have a high volume of trades/transactions, but be in fact a revenue “under-performer”.
While the discretion over pricing allows professionals much freedom to reward client loyalty, or encourage new business or more desirable business, many salespeople and sales force managers with such discretion find it a source of difficulty and frustration. In practice, many professionals do not have a reliable sense of how they themselves price transactions and are woefully uninformed as to the pricing behavior of their competitors doing similar transactions for similar clients. In some industries or firms there are “bench-marks” that are commonly used by professionals (with some tinkering to account for differences between their clients, the types of assets being transacted and the types of transactions). However, the bench-marks are often out of date, or out of step with market realities. Ideally, a professional should be able to charge a client “what the market will bear” but this is impossible without accurate and up-to-date information on the state of the market. There is also pressure on professionals in certain industries or particular firms to maximize revenue by charging higher prices. However, with little reliable guidance, it is difficult for a professional to know how to adopt a pricing strategy that is competitive and revenue-maximizing, without losing touch with his own client, asset and transactional variables.
By the same token, firms want to be able to keep tabs on their own professionals and the prices charged for their transactional services with an eye to maximizing revenue and monitoring the “top performers” and “bottom performers” in their organizations. However, the firms also lack a sense of the overall trends in pricing behavior within their organizations and more broadly within their industry. This is exacerbated by the culture of secrecy in some industries (notably, securities) which disdains sharing any pricing information with competitors. Furthermore, some professionals and some industries use complex price formulas which effectively make pricing opaque.
It would be beneficial to provide a method of modeling pricing behavior through “pricing episodes” for particular transactions by particular professionals to assist in evaluating:                (1) professionals on the basis of their own past pricing behavior;        (2) professionals among their peers in a firm, or across firms; and        (3) groups of professionals (e.g. departments or firms or teams) in a larger context (e.g. market-wide).        